IDEAS home Printed from https://ideas.repec.org/a/ags/ajosrd/342265.html
   My bibliography  Save this article

The Casual Impact of Government Support on the Small Strategic Crop Industry: Malaysia's Experience

Author

Listed:
  • Othman, Kamarudin
  • Omar, Hapiza
  • Fuad , Hanani Ahmad
  • Laidin, Jamilah
  • Ramli, Irlisuhayu Mohd

Abstract

Rice is a staple food for countries particularly in Asia, including Malaysia, hence arise concern on its supply. Thus, this study aims to investigate the causal relationship between the incentives (fertiliser subsidy and minimum price guarantee) given and paddy production in Kedah, the rice bowl of Malaysia. A time-series data ranging from the 1996 main season to the main season in 2018 (1996H1 to 2018H1) employed. Using ARDL and Granger approaches, the result shows that any disequilibrium in paddy production is regulated to accomplish the convergence faster. In the short-run, fertiliser subsidy and paddy prices are not significant in the MADA regions. The results of the analysis show that there are various causes of the long-run in the production of rice with subsidized steel and rice prices related to rice yield. The outcome of this study demonstrates the presence of long-run causality between paddy production with fertiliser subsidy and paddy price with respect to paddy yield. Therefore, to boost the paddy yield, the government should increase the number of subsidies, and control the paddy price to prevent it from falling below the market price. Therefore, future research should investigate the causal relationship between fertiliser and paddy price subsidy to the different types of paddy seeds planted.

Suggested Citation

  • Othman, Kamarudin & Omar, Hapiza & Fuad , Hanani Ahmad & Laidin, Jamilah & Ramli, Irlisuhayu Mohd, 2020. "The Casual Impact of Government Support on the Small Strategic Crop Industry: Malaysia's Experience," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 10(01), January.
    • Handle: RePEc:ags:ajosrd:342265
    DOI: 10.22004/ag.econ.342265
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/342265/files/The%20Causal%20Impact%20of%20Government%20Support%20on%20the%20Small%20Strategic%20Crop%20Industry%20Malaysia%E2%80%99s%20Experience.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.342265?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Tengku Ahmad, Tengku Mohd Ariff & Tawang, Ariffin, 1999. "Effects of Trade Liberalization on Agriculture in Malaysia: Commodity Aspects," Working Papers 32694, United Nations Centre for Alleviation of Poverty Through Secondary Crops' Development in Asia and the Pacific (CAPSA).
    2. Sherlund, Shane M. & Barrett, Christopher B. & Adesina, Akinwumi A., 2002. "Smallholder technical efficiency controlling for environmental production conditions," Journal of Development Economics, Elsevier, vol. 69(1), pages 85-101, October.
    3. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    4. Siti Badariah Saiful Nathan & M. Mohd Rosli, 2016. "Distributional effects of non-farm incomes in a Malaysian rice bowl," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(2), pages 205-220, February.
    5. Anwar, Mumtaz & Chaudhry, Imran Sharif & Khan, Muhammad Bashir, 2009. "Factors Affecting Cotton Production in Pakistan:Empirical Evidence from Multan District," MPRA Paper 22829, University Library of Munich, Germany.
    6. Suresh, A. & Reddy, T.R. Keshava, 2006. "Resource-use Efficiency of Paddy Cultivation in Peechi Command Area of Thrissur District of Kerala: An Economic Analysis," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 19(1), January.
    7. Siti Badariah Saiful Nathan & M. Mohd Rosli, 2016. "Distributional effects of non-farm incomes in a Malaysian rice bowl," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(2), pages 205-220, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kamarudin Othman & Hapiza Omar & Hanani Ahmad Fuad & Jamilah Laidin & Irlisuhayu Mohd Ramli, 2020. "The causal impact of government support on the small strategic crop industry: malaysia`s experience," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 10(1), pages 298-310, June.
    2. Kamarudin Othman & Amir Hussin Baharuddin, 2015. "The total factor productivity in strategic food crops industry of Malaysia," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 5(5), pages 124-136, May.
    3. Kamarudin, Othman & Amir Hussin, Baharuddin, 2015. "The total factor productivity in strategic food crops industry of Malaysia," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 5(05), pages 1-13, May.
    4. Naser, Nazar & Saeedeh, Delfan & Farhad, Zand, 2015. "Reviewing morphologic specifications of acorn leaves and fruits in lorestan province," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 5(06), pages 1-8, June.
    5. Karasoy, Alper, 2022. "Is innovative technology a solution to Japan's long-run energy insecurity? Dynamic evidence from the linear and nonlinear methods," Technology in Society, Elsevier, vol. 70(C).
    6. Akingbade U. Aimola & Nicholas M. Odhiambo, "undated". "Public Debt and Inflation: Empirical Evidence from Ghana," Working Papers AESRIWP06, African Economic and Social Research Institute (AESRI).
    7. Flavio Vilela Vieira & Cleomar Gomes Da Silva, 2018. "Brics Export Performance: An Ardl Bounds Testing Empirical Investigation," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 101, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Bruce Morley, 2009. "A Comparison of Two Alternative Monetary Approaches to Exchange Rate Determination over the Long-Run," International Econometric Review (IER), Econometric Research Association, vol. 1(2), pages 63-76, April.
    9. Asadov, Alam & Masih, Mansur, 2016. "Home financing loans and their relationship to real estate bubble: An analysis of the U.S. mortgage market," MPRA Paper 69771, University Library of Munich, Germany.
    10. Muhammad AJMAIR & Khadim HUSSAIN & Sabahat AKRAM & Ambreen ZEB, 2017. "What determines the growth of services sector in Pakistan? A comparison of ARDL bound testing and time varying parametric estimation with general to specific approach," Turkish Economic Review, KSP Journals, vol. 4(3), pages 308-319, September.
    11. Villanthenkodath, Muhammed Ashiq & Mahalik, Mantu Kumar, 2021. "Does economic growth respond to electricity consumption asymmetrically in Bangladesh? The implication for environmental sustainability," Energy, Elsevier, vol. 233(C).
    12. Bloch, Harry & Rafiq, Shuddhasattwa & Salim, Ruhul, 2015. "Economic growth with coal, oil and renewable energy consumption in China: Prospects for fuel substitution," Economic Modelling, Elsevier, vol. 44(C), pages 104-115.
    13. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    14. Noraida, A.W. & Abdul-Rahim, A.S. & Othman, Mohd, 2017. "The Impact of Sustainable Forest Management (SFM) Practices on Primary Timber-Based Production in Peninsular Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 51(2), pages 143-154.
    15. Balazs Egert & Carol Leonard, 2008. "Dutch Disease Scare in Kazakhstan: Is it real?," Open Economies Review, Springer, vol. 19(2), pages 147-165, April.
    16. Georgios Bertsatos & Plutarchos Sakellaris & Mike G. Tsionas, 2022. "Extensions of the Pesaran, Shin and Smith (2001) bounds testing procedure," Empirical Economics, Springer, vol. 62(2), pages 605-634, February.
    17. Naseem, N.A.M & Tan, Hui-Boon & Hamizah, M.S, 2008. "Exchange Rate Misalignment, Volatility and Import Flows in Malaysia," MPRA Paper 41571, University Library of Munich, Germany.
    18. Daniel Solís & Boris E. Bravo‐Ureta & Ricardo E. Quiroga, 2009. "Technical Efficiency among Peasant Farmers Participating in Natural Resource Management Programmes in Central America," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 202-219, February.
    19. Arash Habibi, 2019. "Non-linear impact of exchange rate changes on U.S. industrial production," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-17, December.
    20. Md.Yousuf & Raju Ahmed & Nasrin Akther Lubna & Shah Md. Sumon, 2019. "Estimating the Services Sector Impact on Economic Growth of Bangladesh: An Econometric Investigation," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 7(2), pages 62-72, June.

    More about this item

    Keywords

    Crop Production/Industries;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ajosrd:342265. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aesstea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.